Headcount Reduction in the GCC
Type
E-journal
Date
3 Mar 2016
Jurisdiction
Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates
Taxonomy
Companies & Corporate Bodies, General Employment & Labour Law, Termination of Employment
Copyright
LexisNexis
Relevant company
Clyde & Co
Legal reference
Bahrain Law No. 36/2012
Analysis
With economic commentators predicting a difficult 2016 employers across the region may be forced to look at staffing levels. With commodity prices struggling to recover, the Chinese stock market losing 8% of its value on the first trading day of the year and with oil prices remaining low, it is no wonder that the first trend of 2016 looks set to be the implementation of cost reduction measures. More often than not, this means reducing the workforce. In this article we examine the issues involved when an employer reduces headcount together with the various regulations applicable across the GCC.
An Employer's ability to lawfully reduce headcount
Redundancy, whereby the need for certain roles is reduced or eliminated, has not historically been a recognised concept across the GCC. However, in the recent amendments to their Labour Codes, Bahrain, Kuwait and KSA introduced provisions providing for a recognition of redundancy and the dismissal of employees by reason of redundancy in certain circumstances.